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The 2021 Career Wisdom You Need from Ruth Bader Ginsburg

Ruth Bader Ginsburg left behind a legacy of wisdom that feels more relevant in 2021 than ever. Here are a few lessons we should all carry into the new year.

By

Rachel Cooke
January 4, 2021

Ruth Bader Ginsburg. The diminutive woman, known affectionately as The Notorious RBG, served as a U.S. Supreme Court Justice from 1993 until her death on September 18th, 2020, at age 87. RBG was the breaker of all kinds of ceilings. She fought, she believed, and she persevered—all actions that feel deeply relevant as we look to the year ahead of us.

Before I charge too quickly into the spin of 2021, I plan to reflect on some of the amazing life and career lessons RBG left behind. She gifted us a legacy of wisdom that will remain relevant for years to come.

So today, let’s reflect on some of what she taught us and consider how it might apply to our own adventures in the coming months.

1. To persuade others, don’t react, respond!

Ruth Bader Ginsburg achieved tremendous things in her lifetime. Much of her success required that she persuade others to share a point of view that may not have been popular.

And persuasive she was. Never one to steamroll or shame others onto her side, RBG was artful in how she changed hearts and minds.

She once shared with the New York Times some wedding-day advice she received from her mother-in-law: “In every good marriage, it helps sometimes to be a little deaf.”

And she goes on to say of that advice:

I have employed it as well in every workplace, including the Supreme Court. When a thoughtless or unkind word is spoken, best tune out. Reacting in anger or annoyance will not advance one’s ability to persuade.

Ruth Bader Ginsburg

I believe she was telling us not to ignore or excuse unkindness or incivility but to label and rise above it in our response.

In 2021, we are all going to be processing and wading through the heaviness that was 2020 as we face the challenges of the coming year. Careless words are likely to be spoken. But when they are, try not to let them trigger a reaction. Respond as the version of yourself you’re most proud of.

Respond as the version of yourself you’re most proud of.

The absence of your emotional reaction will make the intelligence of your response stand out even more. This is one way to bring hearts and minds to your side.

2. Disagree with an idea but respect the person who shared it

RBG maintained lifelong friendships with colleagues sitting on both sides of the political aisle. She was asked about her success at this many times throughout her career.

She spoke with NPR about her friendship with conservative Justice Antonin Scalia and shared that while they disagreed deeply on many issues, she respected him enough to listen to what he said. And although he rarely changed her mind, his thinking pushed and challenged her own, making her even better.

When an idea doesn’t land with you, take a pause. Can you find the positive intent behind it? Can you empathize with the person suggesting it?

She also spoke of their finding common ground through shared interests and humor. She was able to separate her friend and colleague from the opinions he held. And this too feels like a useful skill to cultivate for 2021.

None of us knows what shape the workplace will take in the coming months. We will all hear many predictions, suggestions, and opinions. We will like some and hate others.

But when an idea doesn’t land with you, take a pause. Can you find the positive intent behind it? Can you empathize with the person suggesting it? Is there something useful you can find in it?

Keep the idea and the person in separate corners.

3. Never stop learning

Reading is the key that opens doors to many good things in life. Reading shaped my dreams, and more reading helped me make my dreams come true

Ruth Bader Ginsberg, responding to a letter from an 8-year-old girl

RBG never lost her appetite for more information, for expanding her mind. As much wisdom as she had acquired, it was never enough.

And in this, she wasn’t alone. According to Inc. Magazine, many of the world’s most successful leaders—from Warren Buffet to Tony Robbins to Mark Cuban—are voracious readers.

As we continue to navigate the uncertainty ahead, learning new ways to do things will be critically important. So make continuous reading and learning a priority in 2021.

Not sure how to make it happen? Here are a few ideas:

  • Choose your sources wisely. Don’t try to read everything. Explore different books, publications, or blogs to see which resonate most with you.
     
  • Schedule reading time. Put reading time in your calendar. Maybe it’s 10 minutes a day. Maybe it replaces what used to be a commute before many of us started working virtually. Get creative.
     
  • Try audio. Hey, like podcasts or audiobooks? They’re a great source of inspiration, motivation, and knowledge. Maybe you can listen while you’re cooking or working out.

4. Prioritize self-care

RBG was so famous as an exerciser that her personal trainer published a book of the workouts she was still doing into her 80s. Once asked who the most important person in her life was, she famously responded, “My personal trainer.”

For RBG, intense exercise gave her the energy she needed to deliver her most impactful work. This is a lesson we all need to carry into 2021. As stress and burnout continue to threaten and plague us, we must all be mindful of how we manage our energy levels.

Working endless hours isn’t the most effective or fulfilling path to success. Working well is what delivers results. So find ways to care for yourself, to recharge your tank, every day.

You too may enjoy some intense exercise. Or you may choose to walk, meditate, journal, or call a friend. There is no right way to practice self-care, but doing it in some form is a must!

If you want some self-care guidance when it comes to fitness, nutrition, and coping with stress, here’s where I shamelessly plug podcasts from my amazing Quick and Dirty Tips colleagues:

Search for these wellness experts on your favorite podcast platform or visit QuickandDirtyTips.com.

I hope these nuggets of wisdom have helped you feel empowered to take on 2021. These are only a few of the countless gems RBG left us with. They feel, for me, entirely relevant in this moment. So let’s honor and celebrate Ruth Bader Ginsberg’s life together by letting her wisdom guide us through some murky months ahead.


About the Author

Rachel Cooke

Rachel Cooke is a leadership and workplace expert who holds her M.A. in Organizational Psychology from Columbia University. Founder of Lead Above Noise, she has been named a top 100 Leadership Speaker by Inc. Magazine and has been featured in Fast Company, The Huffington Post, and many more.

Source: quickanddirtytips.com

Don’t Freak Out About the Recent Mortgage Rate ‘Spike’

Posted on January 15th, 2021

Queue the panic. Mortgage rates have officially spiked and the media is all over it.

Yep, the average rate on a 30-year fixed mortgage increased from 2.65% to 2.79% this week, per Freddie Mac’s weekly survey.

Freddie Mac Chief Economist Sam Khater noted in the weekly news release that mortgage rates have been under pressure as Treasury yields have risen.

But he did stress that “while mortgage rates are expected to increase modestly in 2021, they will remain inarguably low.”

So he’s not panicking, even though the Washington Post and other news outlets are leading with articles about “mortgage rates spiking.”

When it comes down to it, a 14-basis point move isn’t what I’d refer to as a “spike,” but yes, mortgage rates are higher than they were last week.

But they are still well below the 3.65% average seen at this time a year ago.

Why Have Mortgage Rates Increased Lately?

rates

  • 30-year fixed mortgage rates have fallen to and hovered close to record lows for months
  • It’s inevitable to see some upward pressure after such a long period of record-breaking movement
  • One driver could be the bond selloff, which lower prices and increases yields
  • This might relate to the Democrats winning the Senate and increasing stimulus spending

As noted, mortgage rates are no longer at record lows, and are in fact closer to 3% than 2%. So should we all freak out?

I’m going to go with no. While the media is using the word “spike” in their articles, perhaps to make its relatively boring weekly report a little more interesting, things aren’t that bad.

Remember, mortgage rates are only marginally higher, and probably not high enough to change anyone’s position on buying a home or refinancing their mortgage.

Sure, there’s a chance someone’s monthly mortgage payment now exceeds the max DTI allowed for the loan, but if you were cutting it that close, you’re probably buying too much home.

As to what’s causing the recent upward reversal, mortgage rate watcher Matthew Graham seems to think it relates to the bond sell-off as a result of the Democrats taking over the Senate.

Simply put, the government issues Treasuries to fund additional COVID-related stimulus, which while good for the economy and struggling households, increases bond supply.

The result is lower bond prices, which forces the accompanying yields (or interest rates) higher.

And because Treasuries correlate with long-term mortgage rates like the 30-year fixed, borrowers will pay more to finance their homes.

Is This the End of Low Mortgage Rates Forever?

  • Let us remember that mortgage rates started off 2021 at all-time record lows
  • So it’s not surprising for them to rise off those levels if there’s any pressure whatsoever
  • I fully expect mortgage rates to hit new lows at some point this year
  • But you’re always going to see ebbs and flows over the course of 365 days

While it’s easy to let your fears and emotions get the best of you, perhaps we shouldn’t call an end to the low-rate party just yet.

Ultimately, mortgage rates ebb and flow, similar to how stocks go up and down from day to day, or week to week.

Yes, it’s easy to get caught up in the psychology of it all and panic, but I just don’t believe we’ve seen the end of the low rates.

Additionally, there may even be more record lows in store for 2021.

Remember, the first week of 2021 resulted in new all-time lows for both the 30-year fixed and 15-year fixed, so it’s kind of far-fetched to sound the alarm.

This isn’t to say we don’t experience a period of relatively higher rates, it’s just that it could be short-lived.

Remember, the presidential inauguration is next week and there are thousands of National Guard protecting the Mall in Wasington D.C and holed up in the Capitol Building.

If that gives you confidence that good times are ahead, well, I don’t know what to tell you.

Not trying to be an alarmist, but there’s just too much uncertainty in the air for interest rates to flourish.

In short, bad news tends to lower rates, while good news increases them. I don’t see much good news, even with all that proposed government spending taken into account.

A month ago, the Federal Reserve said it would be keep its short-term interest rate near zero for the foreseeable future as the economy attempts to recover from the COVID-19 pandemic.

They also indicated that they’d continue to buy Treasuries and mortgage-backed securities (MBS) at the current pace until “substantial progress” is seen in the economy.

Call me a pessimist, but I don’t see anything positive happening with the economy this year, or even next year.

I think we’ve all been ignoring the elephant in the room while watching the stock market reach new all-time highs. At some point, reality will hit.

Ultimately, as long as they’re continuing to buy the mortgages this month and next, lenders will continue to make them at low, low rates.

Time will tell if rates will need to rise on long-term fixed mortgages as the Fed eventually exits the marketplace.

Is It Best to Lock Now or Wait?

  • Times like this exemplify the importance of locking in your mortgage rate
  • You are typically given the choice to lock or float your interest rate once you apply for a home loan
  • If you like what you see, lock it in and don’t give it another thought
  • If mortgage rates shoot up quickly, it could be wise to float and wait for things to calm down

My guess is fixed-rate mortgages will settle down and begin making their way back to lows seen earlier this month.

Of course, mortgage lenders are always quick to raise rates, and a lot more patient when it comes to lowering them (at our expense).

You can’t blame them though – they don’t want to get caught out if volatile rates change direction and they’re on the wrong end of that.

Times like these really exemplify the importance of locking in your mortgage rate. No one cares or complains until rates increase.

If you’re happy with your quoted rate, lock it in and forget about it.

If you’ve got some time before funding, maybe float a bit and wait for some improvement.

After all, the more time you have, the more chances you’ve got for rates to move lower.

And you can always lean on your loan officer or mortgage broker if you’re not sure what to do. Most of the experienced ones keep a keen eye on rates.

In summary, you don’t need to panic, but you should be aware of the fluid situation if you’re looking to refinance or buy a home in 2021.

It might also be a good time to consider how long you plan to stay in your home as well.

That could dictate your mortgage decision and whether or not to pay mortgage points for an even lower rate.

Lock in a lower rate.

Source: thetruthaboutmortgage.com

What to Look for When Buying a House

In this article:

While everybody knows that buyers shop based on price range, there are many additional considerations to make when looking for a home. And, most buyers end up refining their criteria once they start touring homes. Ultimately, your home criteria should depend on your personal lifestyle and needs. Regardless of what you’re looking for, here are some general rules you should follow to make sure you’ll be happy with the home you buy for the foreseeable future.

What are the top features buyers look for in a home?

Today’s buyers are juggling many different priorities when it comes to buying a home, but according to the Zillow Group Consumer Housing Trends Report 2019, here are the features that rank as very important or extremely important to most buyers.

Neighborhood wants and needs for buyers

Home features buyers want

28% of buyers look for a home to rent out, 27% looked for smart homes, 58% of buyers looked for assigned parking

1. Search for the right price

Price will ultimately dictate what you can or cannot buy. While looking at homes above your price range can be fun, it’s not a good use of time — and it can lead to heartbreak when you realize it’s not financially feasible. Despite this, Zillow research found that in 2019, just 55% of buyers stayed on budget, while 26% went over their initial budget.

How to set your home buying budget

Use Zillow’s Affordability Calculator: This handy tool gives you an initial budget range based on your income, existing monthly bills, and down payment amount. Once you have that range, you can set up Zillow alerts for homes on the market that fit your price range, along with other criteria.

Get pre-approved: Once you’re ready to really start your home search, you’ll want to get pre-approved by the lender of your choice. They’ll approve you for a loan up to a specific amount, based on your income, debt and credit history.

Forecast your mortgage payment: Even if you are pre-approved for a large loan from your lender, you should make sure you’re comfortable with your estimated monthly housing payment. When you use Zillow’s mortgage calculator to estimate your monthly payments, be sure the taxes, insurance, and HOA fees are accurate — those items can make a big difference in your monthly costs.

2. Prioritize the location

Next to budget, location is one of the most important things to consider when buying a house. The 2019 report uncovered that 24% of buyers found it difficult or extremely difficult to find a home in their desired location. If you can’t find or afford a home in your ideal neighborhood, you’ll want to ask yourself a few questions (and enlist the help of your agent) to find a location that fits your lifestyle, needs and budget. Remember — your home’s location can’t be changed, so take the time to really identify a neighborhood where you’ll be happy live.

Proximity to downtown

Unsurprisingly, homes closer to core downtown areas have better resale value, thanks to their shorter commutes. According to Zillow research, in 29 of the country’s 33 largest metro areas included in the analysis, buyers should expect to pay more per square foot for a home within a 15-minute rush-hour drive to the downtown core. That may be why 15% of buyers who compromise to stay within their budget add time to their commute.

Community attributes

If you like being able to walk to restaurants and shops, try walking the distance to town to see if it’s doable. Spend some time exploring the area, checking out nearby parks and figuring out what kinds of attractions are nearby.

Alternatively, if you’re someone who likes a more solitary life and doesn’t mind driving, you might prioritize a home that offers more privacy, perhaps in a location that’s off the beaten path.

School district quality

If you have kids (or are planning on having kids in the future), you want them to get the best education possible. Checking out the school district ratings is a starting point, but you should visit the local schools to gather your assessment of the education and programs. Even if you don’t have children, the school district that your home is in can impact your future resale value.

Flood zone status

Homes located in flood zones require additional insurance, and buying a home in a flood-prone area means you need to be prepared if a flood actually happens.

3. Think long term

According to the Zillow Group Report, the typical homeowner stays in their home for 14 years before selling. When shopping for a home, don’t just think of your immediate needs. Make sure the home you select will meet your long-term goals, so you won’t have to move again in the near future.

Bedrooms and bathrooms

If you plan to expand your family in the near future, make sure the new home can accommodate your plans, whether it’s an extra room for a new baby, an in-law suite for parents, or a guest bedroom if you’re moving out of state and anticipate lots of visitors. The same goes if you are planning to downsize or you have grown children who will be moving out soon.

Outdoor space

As mentioned above, most buyers rank outdoor space as important. If you have a dog (or plan to get one), have kids who need a safe place to play or are an avid gardener, you’ll want to make sure the home’s outdoor space meets your needs.

Potential to personalize

Many buyers look for a home that’s move-in ready, so they can avoid costly repairs and updates (especially right after moving in). But at the same time, it’s nice to be able to add some personal flair to make a house feel like home. If you’d like to add some of your own style, be sure to steer clear of homes that you won’t be able to change enough to fit your preferences.

Lifestyle amenities

Ideally, your new home should enhance your current lifestyle — and you’ve probably already envisioned what your life in a new home will look like. As you evaluate houses, consider your hobbies and what makes you happy. For example, if you love spending time outdoors, you probably want a home with a nice yard. If you love to cook, maybe a nice, big kitchen is on your wish list. And, think about your current living situation: What things do you wish were different?

4. Assess property condition

TV makes home renovations look easy, but in reality, they’re anything but. If you’re a first-time buyer who has never undergone a renovation, you may want to steer clear of a home in serious disrepair. The costs can add up quickly, and if the home needs structural work, it could delay your move-in, causing unnecessary stress. Here are the three major categories of property condition.

Move-in ready

A move-in ready home is new, close to new, or has been recently renovated. Zillow-owned homes are move-in ready homes that have been recently renovated by a licensed contractor, and are ready for new owners to start their lives.

Minor updates

A home that needs minor updates might have cosmetic issues you’d like to change, or have some dated mechanical systems that could be updated for energy savings. Learn more about minor cosmetic details below.

Major renovation

A home that needs major repairs is usually priced lower due to the work that needs to be done. One upside to a major renovation is the opportunity to personalize the home to your tastes. Keep in mind that the return on investment for a major renovation isn’t 100%, and you risk a delayed move-in if the repairs are more extensive than anticipated.

Check condition of costly systems

No matter the condition of the home you’re buying, make sure your inspector checks to make sure major systems and mechanicals in the home are functioning properly. If issues are uncovered, you’ll want to ask the seller to either repair them before closing or offer a credit so you can fix them yourself. Look out for the following costly issues:

5. Don’t focus on minor cosmetic details

No house is perfect, so try not to get hung up on little imperfections. For example, don’t eliminate a home from your list just because you don’t like the interior paint color. Cosmetic changes are fairly easy and affordable to make. Don’t let the following minor issues keep you from buying a house you would otherwise love:

When you attend showings and open houses, or even when you’re just browsing through pictures online, it’s easy to get distracted by clutter. Try not to pay too much attention to the seller’s stuff — it’ll all be removed by the time you move in. Put in the effort to picture the house as a blank canvas for all of your belongings.

6. Stick with your must-haves

There’s a big difference between wants and needs, so create two different lists when searching for a home. For instance, a shorter commute may be a must-have, but smart home features are a nice-to-have. Practicality and functionality should always take priority over the bells and whistles.

Things to consider when buying a house: needs vs. wants

For example, your list of needs might look like this.

Other items might fall to your list of wants, like these.

Source: zillow.com

10 Things You Need to Do When Buying A Home

Everything you need to know about buying a home — on one index card.

A home is often the biggest financial investment you’ll make in your lifetime. In fact, a recent Zillow analysis reports that the typical American homeowner has 40% of their wealth tied up in their home.

Several years ago, I wrote a complete guide to financial planning on one index card, which went viral and later became a book: “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated” (co-written with Helaine Olen).

Now, following up on my original index card, I’ve written a guide on buying a house. Below is the housing index card — a handy resource to print and take with you as you look at houses or think about buying one — plus some additional advice as you contemplate making the big decision.

Photo by Harold Pollack.

1. Buy for the long run

A home is a significant investment, not to mention a linchpin of stability. According to the Zillow Group Consumer Housing Trends Report 2017, the majority of Americans who sold their homes last year had lived in their home for at least a decade before selling.

Some are even staying for the long haul. Almost half (46%) of all homeowners are like me — living in the first home we ever purchased. In short: Buy a home you want to live in for at least five years — one equipped (or ready to be equipped) with the features and space you need, both now and in the future.

2. Buy to improve your life, not speculate with money

Your home is more than a financial investment; it’s where you sleep, eat, host friends, raise your children — it’s where your life happens.

The housing market is too unpredictable to buy a (primary) home purely because you think it will net a big short-term financial return. You will most likely be living in this home for several years, regardless of how it appreciates, so your first priority should be finding a home that will meet your needs and help you build the life you want.

3. Focus on what’s important to you

Today’s housing market is short on inventory, with 10% fewer homes on the market in November 2017 than November 2016.

So, focus on finding a home you can afford that meets your needs — but don’t get distracted by shiny features that might break your budget. Nice-to-have features often drive up the price tag for things you don’t particularly value once the initial enjoyment wears off.

Make a list of your basic needs, both for your desired home and for your desired neighborhood. Stick to finding a home that meets these needs, without buying extra stuff that adds up.

4. Set a budget and stick to it

It’s important to set a budget early — ideally before you even start looking at homes. In today’s market, especially in the more competitive markets, it’s incredibly easy to go over budget — 29% of buyers who purchased last year did.

The most common culprit? Location. Zillow’s data indicates that urban buyers are significantly more likely to go over budget (42%) than suburban (25%) or rural (20%) buyers.

There’s nothing inherently wrong with that. Local schools matter, and psychologists tell us that a short commute improves your life. But be realistic about your local market and about yourself. Know what you’re willing to compromise on — be it less square footage, home repairs or a different neighborhood.

5. Aim for a 20% down payment

If you can afford it, a 20% down payment is ideal for three reasons:

6. Keep a six-month strategic reserve

While a down payment is a significant expense, it’s also important to build up a strategic reserve and keep it separate from your normal bank account.

This reserve should cover six months of living expenses in case you get sick, face an unexpected expense or lose your job. A strategic reserve will not only save you from financial hardship in an emergency but also provide peace of mind.

When we accumulated a strategic reserve, my wife and I finally felt ready to build for our future. Without it, we were living from paycheck to paycheck, anxiously managing our cash flow rather than saving or budgeting.

7. Get pre-approved, and stick with a fixed-rate mortgage

The pre-approval process requires organizing all your paperwork; documenting your income, debt and credit; and understanding all the loan options available to you. It’s a bit of a pain, but it saves time later. Getting pre-approved also shows sellers that you’re a reliable buyer with a strong financial footing. Most importantly, it helps you understand what you can afford.

There are a variety of mortgage types, and it’s important to evaluate all of them to see which is best for your family and financial situation. Those boring 30- and 15-year mortgages offer big advantages.

The biggest is locking in your mortgage rate. In short: A 30-year fixed mortgage has a specific fixed rate of interest that doesn’t change for 30 years. A 15-year fixed mortgage does the same.

These typically have lower rates but higher monthly payments, since you must pay it off in half the time. Conventional fixed-rate mortgages help you manage your household budgeting because you know precisely how much you’ll be paying every month for many years. They’re simple to understand, and current rates are low.

One final advantage is that they don’t tempt you with a low initial payment to buy more house than you can afford.

8. Comparison shop to get the best mortgage

Though a home is the biggest purchase many of us will ever make, most home buyers don’t shop around for a mortgage (52% consider only a single lender).

I certainly didn’t. This did save me some annoying calls and hassle, but it cost me $40 or $50 every month, for years. The difference of half a percentage point in your mortgage rate can add up to thousands of dollars over the lifetime of the loan. It’s important to evaluate all the available options to make sure you’re going with the lender who meets your needs — not just the first one you contact.

The three most important factors are that the lender offers a loan program that caters to their specific needs (76%), has the most competitive rates (74%) and has a history of closing on time (63%).

9. Spend no more than a third of your after-tax income

It’s better to regret spending too little on your home than spending too much. One-third of your after-tax income is a manageable amount. This isn’t always possible if you live in a place like San Francisco or New York, but it’s still a good yardstick for where to be.

10. Be willing to walk away

Buying a home is a time-consuming, stressful but ultimately rewarding endeavor — if you end up closing on a home that meets your needs. But it’s important to manage your expectations in case you don’t immediately find a home you can afford with the features you need.

Always be prepared to walk away if the sellers don’t accept your offer, the home doesn’t pass a rigorous inspection or the timing isn’t right. Hold fast to your list of must-haves, stick to what you can afford and don’t overreach or settle.

It’s no tragedy to miss out on any particular house. Remember that you’re playing the long game. You want to be happy 10 years from now.

Related:

Originally published January 2018.

Source: zillow.com

Black Knight Adds Guided Close Functionality to eClose Platform

Black Knight said it has delivered new capabilities in the company’s Expedite Close digital closing solution to more easily facilitate fully digital real estate transactions.

“Unfortunately, with cases rising nationwide, COVID-19 will be impacting in-person closings for quite some time to come,” said Rich Gagliano, president of Black Knight Origination Technologies. “As such, the need for a comprehensive eClose solution has never been greater.”

The firm says that in addition to “leveraging advanced intelligence to choose the best, most permissible way to digitally close a loan for each jurisdiction, Expedite Close now offers detailed, document-by-document guidance to help borrowers through the closing package, allowing for a more efficient, contactless process, up to and including the remote online notarization (RON) of all necessary paperwork.”

Gagliano notes that “by giving borrowers access to the same knowledgeable insight into loan documents and line items they would typically receive in-person at the closing table, Expedite Close provides the detailed information and advanced functionality needed to complete an efficient and effective closing process in a timely manner, while operating in a secure, digital environment.”

Upon initiating an eClosing process through the Expedite Close platform, borrowers are provided “a clear overview of documents to be reviewed and signed, as well as individual tags within documents to help them make informed decisions as they complete the required tasks. These tags are configurable by the lender and help the borrower understand information within each document, such as monthly principal or interest payment amounts, prepayment penalties, and other items of importance. Expedite Close can guide borrowers through every step of the closing process, up to and including online notarization of required documents.”

Source: themortgageleader.com

What Is Title Insurance, and How Much Does Title Insurance Cost?

Buying a home often entails also buying various types of insurance to protect your property, and one type you might need to get is called title insurance.

When you buy a home, you “take title” to it and establish legal ownership. A title insurance policy protects you against the possibility that someone else might have a claim on your home. In essence, it ensures that a homeowner and their lender will be okay in the event that the seller or previous owners didn’t have absolute ownership of the house. (It sounds crazy, but sometimes it turns out that the homeowner is not the only one with rights to a home!)

If you need a mortgage to buy real estate, your lender will likely require you to buy a title policy from a title insurance company. Although it’s a cost home buyers incur, getting a title policy from a title insurance company is critical to establishing peace of mind.

Let’s examine the ins and outs of title insurance, why home buyers need it, how much you can expect to pay, and how you can save on a title insurance policy.

What is title insurance?

Holding a title insurance policy means you and your mortgage lender are protected against any financial loss or title issues due to liens, disputes between prior owners over wills, clerical problems in courthouse documents, or fraudulent claims against the property or forged signatures.

A title search will be performed by your title or settlement company to uncover any issues with your title that could give you legal troubles down the line.

The title company then insures your claim to the property’s title. If anything is missed during the search or there are lawsuits questioning your legal ownership of the property after closing, your title insurance policy will cover the costs of resolving the problem.

Why a title search is required with a mortgage

When getting a mortgage to buy real estate, you’ll find that most lenders will typically require that you get a title search before you close the deal with your escrow company. Basically this would mean you’ll have to hire a title company to search local records on your property. Some of the issues they’re looking for include the following:

While most homeowners will never need to use their title insurance, its existence offers protection against a potentially aggravating—and very expensive—financial loss.

Lender’s title insurance vs. owner’s title insurance

There are two types of title insurance: lender’s and owner’s. Almost every lender will require you to pay for a lender’s title insurance policy. This protects the lender—not you—from incurring any costs if a title dispute pops up after closing.

Owner’s title insurance is usually optional, but it’s highly recommended. Without it, you’ll be left footing the bill for all the costs of resolving a title claim, which could be thousands or even hundreds of thousands of dollars. Even though it can feel like you’re hemorrhaging cash when you’re closing on a house, a title insurance policy is one of those things that can save you money in the long run.

“When you consider the benefits of title insurance and some of the unique aspects of title insurance relative to other kinds of insurance, it is clear why it’s risky and ill-advised to purchase real estate without a title insurance policy,” says Brian Tormey of TitleVest in New York City.

You can purchase basic or enhanced owner’s title insurance, with the enhanced insurance policy offering more coverage for things like mechanic’s liens or boundary disputes.

While your title insurance covers you for things such as mistakes in the legal description of your property or human error, be aware that it will have some exclusions—particularly in cases where violations of building codes occur after you bought your home.

How much does title insurance cost?

The average cost of title insurance is around $1,000 per policy, but that amount varies widely from state to state and depends on the price of your home.

Title insurance premiums can vary from a couple of hundred dollars to a couple of thousand dollars. Some factors that can affect the cost of your premium include the title search, examination, and expected cost of any title defects.

“In general, each policy price is based on the purchase amount of the home or the total amount of the loan,” explains Tormey. “Title insurance is a highly regulated industry, so title insurance policy types and costs will vary from state to state. Each state’s Department of Insurance can provide information on the pricing regulations in their state.”

In some states such as Texas and Florida, title insurance premiums are fixed by the government, so you will pay exactly the same amount no matter what. Other states such as California and New Mexico have unfixed premiums, which means that buyers can shop around. Iowa actually underwrites the insurance itself, resulting in the lowest premiums in the country: $110 for properties costing up to $500,000.

Unlike other types of insurance, a title insurance policy is paid with a single premium during escrow while closing for your mortgage. If you’re buying a real estate resale or refinancing, you may be eligible for a “reissue” rate, which could offer a substantial discount off the regular premium—because the title policy is already in effect, and the title research has already been completed.

Here’s a calculator that can help you figure out the cost for your area and purchase price.

How to save on title insurance

In some states, title insurance premiums are the same no matter who you work with, but in the majority of states, you can save money by shopping around. Even in states with highly regulated title insurance industries, there are ways to save. Here are some ways to lower your title insurance costs.

Michele Lerner contributed to this article.

Source: realtor.com

Mortgage Deferment and Mortgage Forbearance—Is There a Difference?

With finances in peril due to COVID-19, many homeowners are in search of mortgage relief. Two strategies that many borrowers are anxious to invoke right now are mortgage deferment and mortgage forbearance.

Both tactics allow a borrower to skip monthly payments for a set period. Depending on the lender, there can be subtle differences between the two terms.

“We are seeing the terms being used interchangeably,” says Sara Singhas, the director of loan administration for the Mortgage Bankers Association.

She adds that both tactics allow a temporary period during which a borrower need not make contractual monthly payments. The differences between the two strategies come at the end of that period.

“What happens at the end of the forbearance period is the amount of payments that you missed during that forbearance will be due in a lump sum,” says Singhas.

Sometimes, lenders will work with borrowers to structure a payment plan, instead of demanding a lump sum.

Deferment—especially special programs that lenders have introduced during the pandemic—often allow customers to repay the money over time or to add it to the end of the loan period.

Clearing up confusion about mortgage forbearance

“In the mortgage world, it’s very fluid … [but] what we hear more is the term forbearance,” says Mary Bell Carlson, a certified financial planner professionally known as Chief Financial Mom. “Overall, forbearance is saying, ‘Hey, something has happened, I cannot pay.’”

A book Carlson has dubbed her Bible of the financial world, “Surviving Debt,” by the National Consumer Law Center, makes no distinction between forbearance and deferment.

“They do not even use the word deferment in terms of a mortgage, everything is called a forbearance in this book,” she says.

If a lender does differentiate between the terms deferment and forbearance, the difference will be at the end of the loan period, according to Singhas.

Some borrowers will be able to add extra payments to the end of the loan or make other arrangements to spread out repayment, while others will not. Sometimes, payment terms involve a new loan or a rewriting the existing loan.

Mortgage loan originator Krista Allred says one differentiation can center on foreclosure proceedings and timing.

“Technically, a mortgage forbearance agreement is when you’ve possibly been late, and the lender agrees not to foreclose during that forbearance period,” says Allred. In this scenario, a borrower already has a history of nonpayment before entering into a forbearance agreement.

But with the pandemic only revealing its enormous scope within the past 30 days, many borrowers haven’t been late—yet.

However, because of sudden job loss or because of the quarantine, borrowers have besieged the phone lines of their lenders, to get out in front of the financial iceberg.

Contact your lender for mortgage relief

No matter what you call it, if borrowers ask for help during this crisis, many lenders are allowing them to miss payments and not charge them late fees or penalties.

“The definition really doesn’t matter. The moral of the story right now is to call your lender. Don’t just assume you can skip a payment. Call them, let them know, and make arrangements,” Allred advises.

Carlson struck the same chord and told us that borrowers shouldn’t get caught in the weeds about the semantics of forbearance versus deferment.

She says, “They just need to pick up the phone and say, ‘Hey look, I’m in a bad situation, I’ve lost my job, and I think it’s going to be rough for the next three months.’ From there the lender can come back and say, ‘Here [are the] options.’”

Due to the current financial situation, the mortgage world is shifting. Options that weren’t on the table for borrowers a few months ago might be available now.

Singhas says the length of time that the forbearance could be extended and the options at the end of the term might be different. She adds that borrowers in good standing prior to the current crisis may able to do a modification wherein any monthly payments missed now are simply tacked on to the end of the loan.

Pressing pause on your mortgage

Whatever terminology your lender uses, it’s important for you to understand what is really happening with your loan. Nothing is free. You can’t expect to stop paying your mortgage forever.

“It’s not free mortgage payment, it’s not free money. [Forbearance] is temporarily hitting the pause button on your mortgage, and not having to make the payment,” Carlson warns.

“It does not necessarily pause the interest that is accruing, and it does mean that you’re going to have to make that principal and interest payment at a later date.”

Key questions to ask before seeking mortgage forbearance

When calling your lender, Carlson recommends asking:

Singhas says some lenders have decided to allow certain loan modifications. In some cases, they will allow the monthly payment to be changed later in the life of the loan, to include the amount missed during the forbearance.

She adds that the main confusion for consumers right now is the fact that most lenders will not necessarily require a lump sum payment after the forbearance period ends.

“I think some people are panicked that if they get a forbearance, they have to pay it all back immediately,” she notes.

“That’s one option, or they can enter into a payment plan if they can’t make the lump sum, and if they can’t make a repayment plan work, there are other options available to them.”

If you work out a forbearance or deferment plan with your lender and don’t just skip payments, it can protect your credit.

“It doesn’t show a positive or a negative, but it doesn’t show like a missed payment,” Carlson explains.

“So if you were to ignore it and just not pay anything and pretend it will go away, that’s absolutely going to affect your credit report in the long run. But the forbearance or deferment is a neutral. It’s not positive or negative on the credit report, but it’s a lot better than having missed payments on your mortgage.”

One caveat to keep in mind is that if you can pay your mortgage, pay it, and don’t ask for relief.

“It’s always better to make your monthly payment if you can,” Singhas says.

For more smart financial news and advice, head over to MarketWatch.

Source: realtor.com

Stock Market Today: New Stimulus Plan Fails to Stimulate Stocks

A week of drowsy trading got no lift from the latest prospect of more government spending.

President-Elect Joe Biden on Thursday evening unveiled a $1.9 trillion “American Rescue Plan” that includes a number of provisions, including $1,400 stimulus checks, supplemental unemployment benefits and a $15-per-hour federal minimum wage.

And yet, stocks went red on Friday.

Perhaps Wall Street had already baked in all of its expectations for the much-anticipated plan. Or perhaps the market remained distracted by COVID itself, which is still taking a hefty toll here in the U.S. as the vaccine rollout seems to crawl forward. Also of some concern was the start of the Q4 earnings season – mixed results from Citigroup (C, -6.9%) and Wells Fargo (WFC, -7.8%) weighed on those stocks and the rest of the financial sector.

The Dow Jones Industrial Average closed 0.6% lower to 30,814, and the rest of the major indices followed suit.

Other action in the stock market today:

  • The S&P 500 took a 0.7% spill to 3,768.
  • The Nasdaq Composite broke back below 13,000, dropping by 0.9% to 12,998.
  • The Russell 2000 dropped hard off its all-time high, losing 1.5% to 2,123.
  • Gold futures weren’t exempt, dipping 1.3% to settle at $1,827.80 per ounce.
  • U.S. crude oil futures finally cooled off, losing 2.4% to $52.31 per barrel.
  • Bitcoin prices, at $39,633 on Thursday, plunged more than 10% to $35,579. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
  • Tesla (TSLA, -2.2%) shares declined after receiving a Street-high $950 price target from Wedbush analyst Daniel Ives, but not a Buy recommendation.

stock chart for 011521stock chart for 011521

Turbulence Ahead?

While optimistic about 2021 overall, many analysts predicted some bumpiness, especially in Q1, and we might be at the onset of one such rough patch.

“We have fairly high conviction in two things,” says Canaccord Genuity equity strategist Tony Dwyer. “Conditions remain ripe for a temporary correction that should give back much of what has been gained since late last year, and when it comes, investors are likely to believe it is something more sinister than an overbought correction.”

One thing that stood out clearly Friday was a flight to income-producing equities. Within the Dow itself, three of the five best performers were so-called “Dogs” – the industrial average’s highest-yielding stocks as of the start of the year.

Business development companies (BDCs), a high-yielding but low-traffic area of the market, also outperformed.

And real estate, much maligned in 2020, earned some attention Friday. Real estate investment trusts (REITs) are well-known among income investors given their mandate to turn over at least 90% of their taxable profits via cash distributions to their shareholders. Many of them currently sport higher-than-normal yields after a difficult 2020, making them a one-two punch of income and rebound potential once the American economy settles back onto its track. Check them out.

Kyle Woodley was long Bitcoin as of this writing.

Source: kiplinger.com

10 Ways to Build Credit Without a Credit Card

September 16, 2020 &• 6 min read by Gerri Detweiler Comments 2 Comments

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Disclaimer

Credit cards are a great tool for building credit. They’re easy to use, offer flexibility, and sometimes even reward you for using them. Most also directly impact your credit score and are used by many people to begin building their credit profile.

But what if you don’t want a credit card or are having trouble qualifying one? Don’t worry. There are other plenty of other ways to build a strong credit history. Here are ten options for building credit without a credit card.

1. ExtraCredit

The easiest way to start building your credit without getting a credit card is to sign up for ExtraCredit and add your rent and utility payments to your credit profile. With ExtraCredit, you can use the service to add bills not typically reported to the bureaus and get credit for bills you’re already paying. We help strengthen your credit profile by adding your rent and utility payments as tradelines to your credit reports with all three credit bureaus. Continue paying those bills on time, and rent reporting can help you add more to your credit history and help you work your way up to a good credit profile.

2. Authorized User Status

Authorized user status is a great way to begin building credit—as long as you and the primary cardholder are on the same page. As an authorized user, you can use the primary cardholder’s credit card and piggyback off their credit card activity. Even if you never use the card, card activity can still be used to positively impact your credit. You’ll want to verify with the credit card company that they report card activity for authorized users. Otherwise, you’ll be wasting your time.

This method comes with some risks, though. Your credit report will reflect how the card is used, even if you’re not the one using it. If you or the primary cardholder racks up an excessive balance or misses payments, that activity could end up damaging your credit instead of helping it. Only become an authorized user if you are both committed to practicing smart credit-building habits.

3. Credit Builder Loans

Credit builder loans aren’t widely publicized, but they are a great way to build credit without a credit card. Smaller institutions like credit unions are generally more likely to offer credit builder loans specifically to help borrowers build credit.

Typically, you borrow a small amount, which is put into a CD or savings account and held until the loan is paid off. You make payments for a set amount of time until the loan is paid. At that time, you can access the funds, including any interest earned from the savings account. And if you’ve made all your payments on time, you’ve been successfully building your credit all along.

These loans often have low interest rates and are accessible to those with poor or nonexistent credit. That’s because you provide all of the collateral for the loan in cash, so it’s not a risk for the lender. Credit builder loans aren’t great if you need the money now—since you need to pay off the loan before you can actually access the funds—but if you have time to build up your credit, they’re a great place to start.

4. Passbook or CD Loans

Similar to credit-builder loans, passbook or CD loans are offered by some banks to existing customers using the balance you already have in a CD or savings account. You build credit as you pay down the loan, and you can access your balance once the loan is paid off. These are very similar to credit building loans, but they use funds you already had in savings as collateral. Interest rates are typically much lower than credit cards or unsecured personal loans as well. Make sure your bank will report payments to the three major credit bureaus before opening this type of loan.

5. Peer-to-Peer Loans

Peer-to-peer loans are made by an individual investor or groups of investors instead of traditional financial institutions, with the accrued interest going back to the investors. While they may sound sketchy, P2P loans are completely legitimate and can be set up through a reputable P2P service like LendingClub—unlike borrowing money from your cousin.

P2P loans will typically accept borrowers with lower credit scores than traditional lenders, but their credit requirements and interest rates will vary depending on the lender—and their rates and fees may be higher than other personal loans. Before you take out this type of loan, ask whether the service reports your timely payments to the credit bureaus so you can get a positive impact on your score.

6. Federal Student Loans

If you’re a student looking to build credit, you may consider a federal student loan. Most federal student loans don’t require any credit history. Private options, on the other hand, often require good credit scores or a cosigner. Don’t take on student debt just to build your credit, but if you’re already considering a student loan, they could be a good way to get started. Federal student loans show up on your credit report, and if they’re paid on time, they can help you build a positive payment history.

7. Personal Loans

Some lenders offer unsecured personal loans to individuals with no or bad credit. These involve borrowing a fixed amount of money and making fixed payments every month. If you don’t have an established credit history, you will likely be charged a higher interest rate. You may be able to get a co-signer to help your odds of approval for lower rates.

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Get matched with a personal loan that’s right for you today.

Learn more

Don’t bother with payday loans. These will not help you establish credit history and will just end up costing you money in the long run. Alternatives like OppLoans do report payment history to the credit bureaus, but their rates are typically higher than traditional personal loans.

8. Auto Loans

Most traditional auto loan dealers report all your payments to the credit bureaus. And since auto loans are secured by the vehicle, they’re less risk for the lender than unsecured loans. That means you might be able to qualify for them even if your credit isn’t stellar—though that might come with the expense of higher interest. If you make your loan payments on time, you might be able to positively impact your score and refinance later, though.

9. Mortgages

Getting a mortgage with no credit history is difficult but not impossible. If your goal is just to start building credit, a mortgage may not be the best place to start. But if you’re ready for home ownership and the possibility of building your credit with a mortgage, you have options. First-time homebuyers may consider FHA mortgage, for example, which is available to individuals with a thin credit file. Smaller lenders like credit unions tend to be more flexible and may help you qualify for a mortgage as well.

Your credit score might take a hit when you first assume a huge debt, but it will rise over time with regular monthly payments. Concentrate on making those payments on time to continue building your credit.

10. Rent

Most credit reports do not contain entries regarding your rent payments simply because landlords don’t bother reporting that activity. But credit bureaus will incorporate timely rent payments into your credit report if that information is submitted to them. If you’re evaluating a rental or you currently rent, ask the landlord if they will report your rent payments. You might also be able to use online rent payment applications to ensure this information is reported.

Want to get credit for your on-time rent payments? Sign up for ExtraCredit. Our unique Build It feature will submit rent and utility payments to the three credit bureaus on your behalf, so you can get credit for paying those bills on time. In fact, we’ll look for your past payments to make sure they are submitted so you get credit for previous rent and utility payments as well.

Keys to Building Credit

Whatever option you choose to build credit without a credit card, you must make payments on time consistently. Late payments deal severe damage to your credit score. Avoid financial obligations that put you at risk of making late payments or defaulting.

You also need to keep in mind your account mix. If you only have installment loans and no revolving credit such as credit cards, you won’t have an ideal account mix. Account mix makes up about 10% of your credit score.

Your credit utilization ratio—or the amount of credit you have tied up in debt—might also suffer if you have no credit card or other form of revolving credit. However, in most cases, no credit utilization is better than high credit utilization.

Ready for a Credit Card?

If you’re ready to try building your credit with a credit card, try a secured credit card. These cards are often available to people with bad or no credit, and they typically start with smaller credit limits that can help you learn responsible money management habits.

OpenSky® Secured Visa® Credit Card

Card Details
Intro Apr:

Ongoing Apr:
17.39% (variable)

Balance Transfer:

Annual Fee:

Credit Needed:
Fair-Poor-Bad-No Credit

Snapshot of Card Features
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card

Card Details +


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The Ultimate List of More Than 50 Budget Categories You Must Use

It is no secret that you need a budget.  But, it is imperative that it includes everything.  Take the time to review your spending and don’t leave anything off of it.  Below you will find a list of household budget categories you need to include. Forgetting even one off might be a big mistake.

It is no secret that the number one thing you must do to take control of your finances is to create a budget.  Without one, you really can’t see where your money goes.  Or, more importantly, you don’t get to direct your money to be spent as you would like for it to be!

While there are posts on how to create a budget, one question I get frequently is, “What categories should I include in a budget?”   When you are new to making a budget, something such as a personal budget categories list can help.  I agree.

As you create yours for the first time, it is important you don’t leave off anything important. A successful budget is one that includes a line item for every way you spend your money.

If you are just learning about budgeting, you will want to check out our page — How to Budget.

There, you will learn everything you want to know about budgets and budgeting.

To help you get a jump start on with your budget, and to make sure you don’t leave off any categories, download our free budget template.  This form has helped thousands get started with creating a budget.

SIMPLE BUDGET CATEGORIES 

Once you have your form, you are ready to figure out your budget categories!  While you may not have each of these as individual line items on your form, just make sure you include them all somewhere in your budget!

DONATIONS OR CHARITY CATEGORIES

These are all of the monthly donations you make to various charities.  Don’t forget about those you may make only once or twice a year as well!

Church
Medical Research
Youth Groups

SAVINGS CATEGORIES

While not needed to live, it is crucial that you always pay yourself before you pay anyone else.  Once you meet your necessary expenses, ensure you are saving enough each month.

If you are in your employer’s retirement plan, you pay those before you get your paycheck, so you would not include them.  However, make sure you account for the different types of savings accounts you may have.

Emergency Fund Savings
Annual Fees, such as taxes, insurance, and dues
College Savings
Investments
Christmas/Birthdays/Anniversaries
Additional Retirement (outside of your employer’s plan)

Read More:  Yearly Savings Challenge

CATEGORIES FOR HOUSING

No one will forget to add housing to their budget.  But, make sure you include the amount you may save for repairs and other expenses. To figure out how much to budget, look over your prior year spending and divide that total by 12.  You will add this to your savings, but you can track it under your housing budget category.

First Mortgage
Second Mortgage (if applicable)
Property Taxes
Insurance
Home Owner’s Association Dues
Maintenance
Housekeeper/Cleaning
Lawn Care

PERSONAL BUDGET UTILITIES CATEGORIES

You can’t live without your water and electricity.  It is essential that you don’t leave any of these off of your budget either!  These are some of the basic budget categories most people will not intend to forget, but just might.

Electricity
Water
Gas/Oil
Sewer
Trash
Cable/Satellite/Streaming Services
Internet (if not part of your cable bill)
Phone

Read more:  How to Lower Your Utility Bills

FOOD

You have to eat. There are only two ways that happens  — you cook or you eat out. Make sure you include both of these categories in your budget.

Groceries
Dining Out

TRANSPORTATION CATEGORIES

You have to be able to get around.  That doesn’t always mean a vehicle as it could mean using other means of transportation.  Whatever method you use, make sure you include all of those expenses in your budget.

Remember that you may not have to pay for some of these items each month, but it is essential you budget for them monthly so that the funds are available when needed.

Vehicle payment (make sure you include all payments for all vehicles)
Fuel
Insurance
Taxes
Tags/Licensing
Maintenance
Parking Fees
Taxi/Bus Fares

CLOTHING

A line item many people leave off of their budget is clothing.  They forget that it is a necessary expense.  While this doesn’t mean you should go and buy new clothes all of the time, it does allow you to replace items which are worn out.

It is also essential that parents include this item as kids need clothes a bit more frequently.

Adult Clothing
Kids Clothing

CATEGORIES FOR HEALTH

Don’t forget your health expenses when determining a budget.  Make sure you include the money you pay towards your co-pays during the year.

Health Insurance
Dental Insurance
Eye Insurance
Doctor Visits
Dental Visits
Optometrist
Medications
Deductible Savings

PERSONAL ITEMS CATEGORIES

Personal is a “catch-all” category which may contain much of your discretionary spending!  Some of the most common types you need to include:

Haircuts/Manicures/Pedicures
Life Insurance
Child Care/Babysitting
Toiletries (if not included in your grocery budget above)
Household Items (if you did not already include in your groceries budget above)
Education/Tuition
Dry Cleaning/Laundry
School Dues/Supplies
Magazines
Gym Memberships
Organization Dues
Postage
Pet Care (food, grooming, shots, boarding)
Photos (school and family photos)
Random Spending (always useful as a way to pay for the things you may not have broken out in your budget)

RECREATION

We all love to spend some time doing things we love.  Don’t forget to include your entertainment category when determining your budget.

Entertainment (movies/concerts)
Crafts
Hobbies
Parties
Vacations

DEBTS

Once you pay off your debt, these will go away entirely and will no longer be needed.  You can learn how to get out of debt and get started with that (once you have your budget).

Credit Cards (all debt)
Unsecured loans
Home equity loans
Student loans
Medical loans

Now you have the categories you need for your budget!  Take the first step in getting control of your finances by putting this to work for you.

caclulator on desk to figure budget categories

caclulator on desk to figure budget categories

Source: pennypinchinmom.com